LAKEPORT, Calif. – The Lakeport City Council on Tuesday voted to take part in a process that’s proposed to assist it and the county of Lake arrive at an agreement on the South Lakeport annexation.
Annexation of the South Main Street corridor – reported to be the most lucrative commercial corridor in county jurisdiction – has long been a goal for the city of Lakeport.
Since the early 1980s, the city of Lakeport has included the area in its sphere of influence, defined as an area outside of a city’s legal boundaries that is the site of its probable future expansion.
The city of Lakeport provides wastewater treatment for the area, and its future plans include the installation of a water main throughout the annexation area in 2021 in conjunction with the South Main Street improvement project, city officials reported earlier this year.
In August, the council held a special meeting during which it approved a resolution to submit an application to the Lake Local Agency Formation Commission, or Lake LAFCo, to annex the 136-acre area along South Main Street, as Lake County News has reported.
The proposed annexation is a point of contention between the city and the county, so much so that two county supervisors – Tina Scott, who represents Lakeport, and Moke Simon, from Middletown – attended the August special meeting to ask that the council not approve the resolution.
However, the council voted unanimously at that time to move forward.
A key issue in the annexation is sharing of sales tax revenue for the annexation area. The city and the county entered into preannexation agreements in 1997, 2001 and 2002, and the city maintains they remain valid, while the county does not.
The 1997 agreement provides for the city to pay the county $210,000 in tax revenue over seven years to offset the loss of the sales tax.
At its Nov. 20 meeting, LAFCo deferred making a decision on that 1997 agreement.
Instead, as LAFCo considers the annexation application, it is proposing a path forward in which it wants to get both sides to the table to negotiate.
In a letter dated Dec. 4 and addressed to County Administrative Officer Carol Huchingson and Lakeport City Manager Margaret Silveira, Lake LAFCo Chair Bruno Sabatier – also the District 2 representative on the Lake County Board of Supervisors – asked the city and the county to participate in good faith in a process LAFCo is proposing.
Lakeport Community Development Director Kevin Ingram told the council on Tuesday that both the city and county have done their own fiscal analyses of the potential annexation, and Ingram said now LAFCo is proposing to do a third – and impartial – fiscal analysis, which it believes is the best way forward. LAFCo wants the city to pay for that study.
Sabatier’s letter notes, “It is apparent that the real dispute between the City and the County is over how the property and sales tax revenue from the Annexation area should be apportioned if it is annexed. Since there is substantial disagreement about the fiscal impact of the annexation, the Commission determined that a third fiscal analysis needs to be prepared by LAFCo to provide an objective more accurate determination of the revenue and service impacts of the annexation, for both the County and the City.”
He said LAFCo will retain an independent municipal economics consultant to review the previously prepared fiscal and service data prepared by both the city and the county.
“LAFCo’s consultant will prepare a report objectively setting forth the estimated service costs for each agency within the annexation area and make recommendations for an appropriate apportionment of tax revenue,” Sabatier said.
Ingram said the city recently conducted a revised fiscal analysis and said that would be provided to LAFCo.
Following the completion of the new fiscal analysis, Sabatier said LAFCo will schedule a facilitated meeting with representatives of the city, the county and LAFCo, with an independent facilitator to discuss the annexation and its fiscal impacts. Two members of each legislative body will be asked to participate.
“Working together in good faith, LAFCo is confident that this process will result in a resolution of the disagreements and result in a new tax sharing agreement that both parties can agree to. LAFCo will pay for the facilitation costs and retain a qualified independent facilitator from outside the area,” Sabatier wrote.
Sabatier asked that both the city and county put the matter on their next available agendas within 30 days of the date of the letter and provide a response as to their legislative bodies’ willingness to participate in good faith.
If they don’t choose to participate, Sabatier said LAFCo will have no alternative but to proceed to make a determination on the applicability of the 1997 tax exchange agreement to the annexation applications.
Ingram said city staff supported moving forward with LAFCo’s request.
Councilman Kenny Parlet, who is the city’s representative on LAFCo, said the commission’s recent meeting was very productive.
He pointed out that the city’s fiscal analysis was completed by an auditor recommended by John Benoit, the LAFCo executive office.
However, Parlet concluded that if another fiscal analysis solved the “old turf war” around the annexation, it’s worth it.
Silveira said that no financial impact for the study was listed in staff’s memorandum to the council because they don’t know what the cost will be.
Parlet moved to approve the request, which Councilman Tim Barnes seconded and the council approved 5-0.
The Board of Supervisors’ last meeting of the year was on Tuesday. So far, the annexation negotiations proposal has not been placed on an upcoming, published agenda.
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Lakeport City Council approves moving forward with good-faith negotiations on South Lakeport annexation
- Elizabeth Larson
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